TaxTMI 
TaxTMI 
2014 (2) TMI 523
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....ubmissions, perused the orders of lower authorities and material available on record. In the instant case, the assessee sold its factory land and factory building for a composite consideration of Rs 22,00,000/- and the assessee disclosed Rs 55,815/- as long term capital gains derived therefrom. 4. The Assessing Officer observed that on factory building, depreciation was claimed by the assessee and as the transaction was sale of a depreciable asset, he treated capital gains derived therefrom as short term capital gains and computed at Rs 10,13,110/- i.e. Rs 22,00,000 - Rs 3,20,000 - Rs 44,834 - Rs 8,22,056/-. 5. On appeal, the Ld. CIT(A) held that the transfer of capital asset in question can be treated as transfer of an undertaking an....
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....et was sold for a composite consideration as a single transaction, therefore it was a case of sale of an undertaking. 8. We find that the assessee in reply to show cause notice issued by the Assessing Officer submitted before the Assessing Officer as under: "Vide letter dated 10.12.2010 the assessee furnished explanation in this regard. The relevant portion of the same is reproduced here for reference:- "Your goodself has called for to submit details regarding sale of factory land & Building during the year and applicability of provisions of Sec.50 of the I.T. Act on the said transaction. In this regard, we would like to submit that during the year, the company has sold its factory land alongwith factory building stood thereon a....
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.... the Commissioner of Income-lax (Appeals) in paragraph 12 of his order has observed: "It is not a case of transfer of series of assets individually but a transfer of the entire business undertaking as a whole." 10. The Tribunal has not interfered or set aside the aforesaid finding of the Commissioner of Income-tax (Appeals). All that the Tribunal has observed in its order (in paragraph 5) was that "the sale in question was not as a running business". Thus, all that the Tribunal has held was that the business relating to the capital asset in question, i.e., the "bakery" was not running when it was sold, but was closed. The Commissioner of Income-tax (Appeals) has clearly held that it was the entire concern which was sold. No doubt the ....
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....sset. Section 50 of the Act deals only with transfer of depreciable assets. Once the land forms part of the assets of the undertaking, and the transfer is of the entire undertaking as a whole, it is not possible to bifurcate the sale consideration to a particular asset. As already observed above, section 50 of the Act applies only when depreciable assets alone are transferred. 14. The decision of this Court in M. Raghavan Vs. Asstt. CIT (2004) 266 ITR 145 relied on by the learned counsel for the department is clearly distinguishable because that was a case where the asset in question was a depreciable asset. In the present case, it has been found that the whole undertaking was transferred including land which is not a depreciable asset. ....